Universal Basic Income in India: Download PDF Notes in Hindi & Eng

By BYJU'S Exam Prep

Updated on: September 13th, 2023

Nowadays Universal Basic Income (UBI) is seen as a remedy to eradicate poverty but Is India really prepared for this mega step? Here in the article, we are addressing Universal Basic Income in detail wherein it is dealt in with different perspectives. India is taking baby steps towards a Universal Basic Income (UBI) variant on a pilot basis in order to check the viability of the same.

At the end of this article, you also can download the Universal Basic Income PDF in Hindi and English.

Universal Basic Income

  • UBI is a periodic cash payment unconditionally distributed to all on an individual basis, and the expenditure of the same can be chosen freely by the people concerned.
  • This scheme is designed to eliminate misallocation, exclusion, and leakage.
  • In India, the scheme’s scope will be limited to people belonging from economically weaker sections of the society.

Economic Survey 2016-2017

  • The Economic Survey 2016-17 recommended the concept of Universal Basic Income (UBI) as a substitute for various social welfare schemes to reduce poverty in the country. The survey points out the costs and benefit of the UBI scheme.
  • The Survey states that the UBI is based on the principles of universality, unconditionality, and agency. It is a conceptually appealing idea but in reality, a numerous challenge in implementation may render it as a useless add-on rather than a replacement of current anti-poverty and social programs.
  • Also, improper allocation of resources to 6 largest Central Sector and Centrally Sponsored Sub-Schemes across districts, points out that the districts wherever the requirements are highest are precisely the ones where State capacity is the lowest.
  • This implies that a more efficient way to address poverty would be to provide them resources directly, through a UBI.

Exploring the laws and prerequisites for the foolproof implementation of UBI, the Survey points out two prerequisites:

  • Operational JAM (Jan Dhan, Aadhar and Mobile) system that ensures, the cash transfer credits directly into the account of a beneficiary
  • Centre and State government to negotiate on cost sharing for the program.
  • The Survey states that a UBI that reduces poverty to 0.5% would cost between 4-5% of Gross Domestic Product, supposing those in the top 25% income bracket do not participate.
  • The current subsidies cost about 3% of GDP, on the contrary.
  • According to the survey, the UBI is a strong concept but not mature enough for implementation but is certainly mature for a serious discussion.

Merits of UBI:

  • Social Justice: UBI promotes the basic values of a society by considering every individual as equal and free. It promotes liberty of choice and let people choose a decent way of living as per their needs.
  • Poverty Reduction: It is the fastest way of reducing poverty as it hits it directly.
  • Agency: An unconditional cash transfer treats citizen as agents, not as subjects. By changing the unit of beneficiary from household to individual, UBI can enhance agency, especially of women within households.
  • Employment: UBI could also open up new possibilities for labour markets. It creates flexibility by allowing individuals to have partial or calibrated engagements with the labour market without fear of losing benefits.
  • Administrative Efficiency: With fully operational JAM, the administration could be made efficient by having a single subsidy line than a multiple of subsidies given at different points via different modes.
  • Socio-economic empowerment: Parameters like health, education, financial inclusion etc. will boost the overall socio-economic condition of people.

Demerits of UBI:

  • Huge financial resources are needed.
  • UBI reduces the very incentive to work. People may not work if they start getting things for free.
  • Issues like illiteracy and lack of financial inclusion could hamper the effective functioning of UBI.
  • It can potentially shrink labour force participation.

Indian case

  • In order to benefit the elderly, widows and people with disabilities, the central government already operates several social assistance programs and pensions.
  • The Indira Gandhi National Old Age Pension Pension Scheme, the Indira Gandhi National Widow Pension Scheme, the Indira Gandhi National Disability Pension Scheme and the National Family Benefit Scheme are some of these schemes.
  • Many states also have programs of this kind. One such system, named Destitute Widow Pension Scheme, is the widow pension scheme of Tamil Nadu. It offers widows with a pension if they fulfill certain circumstances.
  • Another scheme is the Agriculture Investment Support Scheme or the Rythu Bandhu scheme of Telangana. In this system, each season the state government gives out Rs 4,000/- per acre per farmer to buy agricultural inputs.
  • Thus, while the discussion of offering revenue for the poor is gaining traction, the idea of supporting revenue for the poor is not completely new.

UBI Trending Recently

  • After a declaration by Sikkim Chief Minister Pawan Kumar, the concept of Universal Basic Income (UBI) again struck the headlines.
  • By 2022, if re-elected to power, the Sikkim Democratic Party (SDP) proposed a basic income.
  • Then the north-eastern state could become the country’s first to attain the UBI implementation milestone.
  • UBI envisages a network of social security that seeks to ensure a dignified life for all, a concept that is supposed to gain traction in a global economy filled with uncertainties due to globalization, technological change and automation.
  • The person behind the system, former CEA Arvind Subramanian, suggested that it can be possible to roll out this innovation in phases.
  • He suggested scrapping nearly 940 welfare systems to discover the cash for the same, which could be approximately 4.9% of GDP.
  • On a pilot basis, few other states such as Madhya Pradesh, Gujarat, and Maharashtra launched UBI.
  • For example, it was introduced in eight villages in Madhya Pradesh, out of a complete sample of 20 chosen villages with the assistance of the Self-Employed Women’s Association (SEWA).
  • The research produced beneficial outcomes in terms of decreased starvation, malnutrition and disease, and improved attendance at college.
  • The World Economic Forum valued this experiment, although it does not subscribe to the basic income concept.
  • The WEF saw it as a positive move towards sustainable and inclusive growth.
  • The fact that there was no conspicuous consumption or social evil spending by the villagers is also remarkable, thereby dispelling a common criticism of the system.

UBI – Global models

  • The idea of UBI is not new. Several experiments and pilot project have been implemented across the world earlier, but not fully adopted by any country.
  • Countries like Canada and Brazil have experimented with their own models and applied them to solve the gaps in their welfare schemes.
  • America has no UBI, but it provides social insurance-an income given if the person loses his or her work or becomes sick. The reach of the system, however, is restricted to those below the poverty line or those who, if they stop earning, are likely to fall below the line.
  • Bolsa Familia is a welfare system envisaged by the Brazilian government in 2003 where it offers 70 reals indirect transfers to low-income households.
  • This plan is considered a success story as Brazil saw a 28% decrease in poverty.
  • Other areas of the globe, including New York City and the Philippines, have replicated this model.


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